More than 750 million people worldwide lack electricity, and energy poverty is a powerful driver of health and economic inequality. While Bloomberg’s investment is aimed at combating climate change, Ogunbiyi said the funds could also help solve a range of crises caused or exacerbated by a lack of electricity, including food shortages and poor health care.
“It’s important to understand that this is a crisis in its own right,” she said. “People who don’t have access to electricity or a clean kitchen is not an inconvenience. It is the difference between life and death for many people, and it needs to be treated as an emergency.”
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Total clean energy investments in developing countries were less than $150 billion in 2020, according to a June 2021 International Energy Agency report, which warned that by the end of the decade, this funding would need to be more. to $1 trillion a year to put the world on track to achieve net zero emissions by 2050.
Mrs. Ogunbiyi said that as Sustainable Energy for All and other organizations work with the 10 countries to create energy transition plans or update existing ones, they would encourage country leaders to sign “no new coal” pledges.
The idea behind the type of investment Bloomberg is making is for a philanthropic organization like his to take the biggest risk at the outset of a project that decision makers might be skeptical about, and if it works, the project will become attractive to them. conventional investors. later, said Rachel Kyte, dean of the Fletcher School at Tufts University and former chief executive of Sustainable Energy for All.
Even if Bloomberg’s money can lower the financial barriers, the political barriers remain formidable. The fossil fuel industry’s deep opposition to renewable energy development “is a huge obstacle,” said Tom Sanzillo, director of financial analysis at the Institute for Energy Economics and Financial Analysis.
But what funding like Bloomberg’s can do is create a foundation on which a transition to renewable energy from fossil fuels becomes the smartest financial decision for companies. That means increasing the risk involved in developing fossil fuels, Sanzillo said. It also means decreasing the risk involved in developing renewable energy.
“I think, overall, market forces are on Bloomberg’s side,” Sanzillo said. “If he had done it 10 years ago, I probably would have said it might not work. I think here you have a better wind at your back.”